MIDLAND, Texas, Feb. 9 (UPI) -- A Texas energy regulator struck a note similar to the struggling industry, saying the state's oil sector is positioned for a rebound once markets improve.
Texas Railroad Commissioner Christi Craddick, who helps lead the state energy sector, said Texas is well-equipped with a skilled workforce and strong infrastructure to support the industry even as crude oil prices continue to hold near 10-year lows.
"These factors have allowed companies to better weather the downturn," she said in a statement.
A decline in crude oil prices means less capital is available for exploration and production. While some inland shale basins in Texas are more resilient than others in the weakened market, the state regulator last month issued 510 new drilling permits, compared to 1,102 the previous year.
Data provided by oil field services company Baker Hughes show Texas lost 19 rigs last week to record 262 for the week ending Feb. 5, about 392 less than the same week in 2015. Texas, the No. 1 oil producer in the nation, accounts for about 46 percent of all rig activity in the United States.
Crude oil prices are lower because supply far outweighs demand. Craddick stressed that Texas operators were more efficient, and therefore more resilient, because of lower production costs.
"And when demand for oil rises again, as it is certain to, Texas will be well-positioned and ready to respond," she said.
Her comments echo statements made by energy company executives who said spending cuts and layoffs are designed as streamlining measures meant to position the company for recovery once oil prices rebound.
Tax revenues for the state from the energy sector are down by about 50 percent from 2014, a review from the U.S. Energy Information Administration found. Data from the U.S. Labor Department show employment in the Texas mining sector, which includes energy, was 10 percent lower in December than the previous year. Total non-farm payrolls for December are up 1.4 percent year-on-year.